Stimulus: $5 Billion To Help New York Cover Medicaid Costs

New York will get its fair-share of the
federal stimulus cash, but local residents shouldn't expect a
whole lot in terms of new infrastructure or anything good like
that. Instead, most of the cash will go to filling holes -- not
potholes, but holes in the budget. New York, of course, is facing
a monster deficit, and we probably won't slash our way to the
promised land:

Reuters: New York state could receive at least $5 billion in
direct aid from President-elect Barack Obama's planned stimulus
package, helping to shrink a historic budget deficit, according
to U.S. Sen. Charles Schumer.

The stimulus package is expected to include $80 billion to $100
billion in additional funding to localities and states for
Medicaid, the federal health care funding program for the poor,
the elderly and the disabled, Schumer said in a statement.

The package will also include money for infrastructure projects,
said the statement, which was released ahead of a news conference
scheduled for Monday.

"New York's (Medicaid) matching rate could be temporarily
increased by approximately 10 percent -- resulting in at least $5
billion a year," said the statement.

"This money would be injected directly into the state coffers and
could help defray budget cuts and future tax hikes," the New York
Democrat said.

Is filling a Medicaid budget gap actually economic stimulus? Not
really. Will we let states like New York and California go
bankrupt (or de facto bankrupt)? Nope. But as we've
noted, the easiest way to transfer liabilities from the states to
the federal government would be the nationalization of
healthcare. Until we do it in one big policy action, expect to
see a lot more incremental action like this. Eventually